Today, Treasury Secretary Timothy Geithner warned that the debt limit will be reached by December 31, just five days from now, but that by taking "certain extraordinary measures," the Treasury Department will be able to postpone the date.
In a letter to Senate Majority Leader Harry Reid (D-Nev.), Geithner said that the measures would add about two months -- or an additional $200 billion -- to the limit under normal circumstances. However, given the tax and spending uncertainty due to the so-called fiscal cliff, Geithner said, he cannot predict how much time the measures will actually allow.
The debt ceiling is the legal limit for Congress to borrow money. The 2011 summer debt ceiling crisis caused Standard and Poor's to downgrade the credit rating of the United States and contributed to economic turmoil before Congress and President Barack Obama reached a deal to raise the limit.
The letter from Geithner to Reid comes as the fiscal cliff is set to happen at the end of the year, with no apparent deal close in Congress. The cliff will bring austerity -- a combination of spending cuts and tax increases -- which many expect to slow economic growth in the coming year.
Does it seem to the rest of you that it would be helpful to try to "up the pressure"" to get 25 House GOP representatives to crossover and support a simplified bill crafted by Senate Majority Leader Harry Reid that will include at a minimum a tax cut for the those earning less than $250,000, and a solution to the Medicare "doctor's fix?" Or, is it totally out of our hands and up to President Obama and Speaker Boehner?
I've often thought, such an approach might give President Obama a stronger hand in negotiating an extension of the debt-limit until after the 2014 elections, and perhaps even extensions of unemployment benefits in return for adjustment to the alternative minimum tax, real estate tax, and reductions or delay of some of the defense cuts in the sequestration deal. I'm still hoping that we can avoid what would appear to be a tragic blunder of making a concession on chained CPI adjustments to Social Security.
But, the sad reality might be "we," and by that I mean folks like me, have little ability to influence the outcome at this stage. This suspicion adds to my frustration in these budget negotiations.